After a series of successful acquisitions, a wholesale petroleum distributor pivoted their focus to improve cost management within their Logistics division to address synergies and combat challenging market conditions.
Carpedia was invited to perform an assessment of their logistics division across the US and identified the following opportunities:
- Lack of a formal method to align driver headcount requirements with demand
- Poor visibility into departmental performance, leading to poor driver management and decreased efficiency
- Inefficient planning and routing from dispatchers, resulting in missed/late deliveries, unsatisfied customers, and disjointed roles/responsibilities
- Ineffective management behaviors across the department
The engagement was designed to improve driver efficiency through developing and installing improved visibility into real time performance, improved dispatcher planning and scheduling, and enhancing the overall management performance system of the logistics division. The impact of the engagement allowed the organization to navigate and stay competitive in a complex and challenging market. With improved performance management capabilities, resource planning systems, and forecasting tools, the logistics department is in a better position and is poised for growth.
Key changes included:
- Critically analyzed tasks of both drivers and dispatchers to understand lost time within each role
- Created labor planning guidelines to predict hours requirements based on projected volume
- Developed and installed hourly and daily performance metrics, enabling managers to question and follow-up on variances to plan
- Installed pre-trip checklists that were installed across the fleet to limit the amount of lost time realized from in-field breakdowns
- Established a clear and concise communication cadence that unified all regions across the US markets
The Results
Specific results include:
- 4 : 1 ROI
- 120% of Estimated Benefits were Achieved
- 11% Reduction in Driver Cost per Gallon Delivered
- 16% Reduction in Dispatch Cost per Gallon Delivered
As an outcome of the successful engagement, Carpedia has completed an additional 3 engagements within the company’s other departments.
